Naively one would think that Russia should not worry about NATO because they have nuclear weapons. Similarly, one would think that European countries that are members of NATO should not worry about Russia, because they also have nuclear weapons. Neither of the two can win a war against the other. Given that, why are countries like Germany and Poland increasing their defense budgets? Especially since 1) if Russia is unable to win a conventional war against Ukraine they are surely also unable to win a conventional war against NATO, and 2) NATO intelligence assessments are that Russia will take 1-3 years to replenish their forces.
Nuclear deterrance doesn't avoid war. India and Pakistan are both nuclear powers yet they fought a war in 1999.
Countries would always want to avoid the nuclear option - they will try to achieve their goals with conventional means and only in extreme cases (e.g. if Moscow or St. Petersberg is captured) they will go the nuclear way. While nuclear option is there, it will almost never be exercised. Even Putin has very recently said:
"We have not gone mad, we are aware of what nuclear weapons are. We aren't about to run around the world brandishing this weapon like a razor."
Every country would like to be independent in some sense - i.e. independently able to counter a Russian attack, without external help. Plus, while NATO might help with weapons, they may not want to get involved in small scale wars to avoid escalation into a World War.
No matter how wealthy and prosperous a nation is, if it is deprived of its independence,
it no longer deserves to be regarded otherwise than as a slave in the eyes of civilized world.
To accept the protectorate of a foreign power is to admit to a lack of all human qualities, to weakness and incapacity.
- Ataturk on Independence
Military experts point out that Germany had not a single combat-ready brigade to defend the country's territory. It does not suit Europe's economic superpower that the Bundeswehr is even lacking equipment. Hence they made big promises about miliary spending. As of Early Jan 2023, it doesn't look like they're following through:
“It’s still open whether that [military spending goal] will be achieved [in 2023]", Hebestreit (Germany's Federal Government Spokesperson) said, adding that his “cautious expectation” was that Germany would still meet the target within this legislative period, which ends in 2025.
Also if someone like Trump comes along again they may refuse to adhere by NATO norms unless European countries fulfill the 2% GDP criteria. Trump questions, "what good is NATO?". The US is involved in many conflicts around the world and they might expect more from Europe.
U.S. attention has increasingly been pulled toward Asia. Despite Russia’s invasion of Ukraine, the U.S. Department of Defense has continued to prioritize China.
The need for the United States to provide precious military assets to defend Europe against Russia, support U.S. allies in Asia, and maintain other global commitments, such as in the Middle East, may put tremendous strain on the United States. Washington will therefore need more from Europe.
The conflict in Ukraine has raised the importance of military power in European minds, and they now want to contribute more to it.
Several reasons, and a correction to this assumption:
Russia's nukes have been helpful in keeping out direct Western involvement. They have however utterly failed to modify battlefield circumstances to Russia's benefit. i.e. nukes are fairly useless, except as deterrent. Used against a near-peer nuclear power they are essentially suicide. Used against a non-nuclear power they are reputational self-immolation on a global scale.
This war is showing that quantities matter. European countries don't have anywhere near the volume of gear, parts and ammunition to fight a high intensity war like Ukraine. Look at stats like UK artillery ammo lasting 2 weeks at Ukraine levels. Correcting this needs $$$. Manufacturing capability also matters: one concern is that NATO is running out of ammo to give to Ukraine and can't easily ramp up. As comments say: NATO nations have donated non-negligible amounts of their weapon and ammo stores and those will have to replenished in the medium term. Not that it hasn't been somewhat useful: Poland for example donated old T72s and is buying shiny new M1s (not criticizing Poland here, quite the opposite). But it will co$t.
France's nukes are France's nukes. UK's nukes are UK's nukes. See a pattern? They are not Germany's and Germany can only hope that they would be available to support German interests in an extreme situation. Treaty article 5 gives it a good reason to assume so, no more.
Russia has shown NATO that their worst case scenario - a vast, unpleasant, irrational, heavily armed neighbor - has come true. Albeit one with a huge dollop of incompetence. So it makes sense to revaluate spending predicated on a kinder, nicer, international order between major states. See also Japanese and Taiwanese spending increases.
The West's military spending has over-focussed on counter insurgency warfare and peacekeeping in the last 20 years since 9/11. A return to the prospect of high intensity warfare against peer adversaries means the re-acquisition of capabilities that had been neglected during that time.
Another way to look at it is that this war is the first near-peer industrial war since Korea, Iran-Iraq war or Gulf War 1 (2003 had a severely degraded Iraqi army). What works, what sucks? Drones? Tanks? Artillery? Jets? SAMs? ATMs? Reactive armor? Snipers? Unit densities? Camo? Attack helipcopter gunships? If NATO doesn't want to fight the next war with a Maginot Line (or a Jean Bart battleship for that matter) they need to ditch old stuff and buy new stuff. My takeaway? Semi-trained, short-to-train, motivated, citizen soldiers a la Switzerland might be something to consider. People over "just" gear. And, look, ma, no offense! Still not cheap.
Trump's election and continuing influence shows that the US may be headed for one of its occasional periods of retreat from international involvements. In that case, "NATO-without-USA" funding needs look very different from a those in a context of "NATO-with-USA". Nor is clear why, 77 years after WW2, European nations need to be so dependent, in their own backyard, on support from the US for their own safety, even as they often criticize the US for insufficient social spending. The fact that Trump complained about this arrangement does not necessarily make it an invalid complaint.
Last, at least for Germany, it seems the actual rearmament drive is more bark than bite, so far.
The air appears to be going out of the Zeitenwende. Not only will Germany not hit the 2 per cent defence spending target this year, but it will fall short in 2023 and 2024 too. New military procurement is progressing at a sluggish pace. A backlog of repairs and upgrades needed by its armed forces looks increasingly intractable.
War on the Rocks podcast last week claims that 2% goal isn't going be reached till 2024/2025 earliest and laws haven't been passed to get there.
Nuclear weapons do not substitute for conventional military power
There are many reasons why European countries want to improve their military power versus where they were before the Russian invasion of Ukraine. But by far the biggest consideration is that the NATO nuclear umbrella is not a substitute for conventional military power.
There is only one circumstance where the possession of nuclear weapons might substitute for conventional strength. That is where your strategy clearly is a sort of "dead man's handle" and states a willingness to use nukes immediately as a response to a non-nuclear invasion. This is a fairly mad strategy which few have ever contemplated other than–perhaps–North Korea where its relevance is not obvious as few think they face a realistic threat of invasion.
Most countries see the presence of nuclear weapons as a deterrent to the use of such weapons by others. This is a little like how the possession of poison gas by both sides played out in WW2 where, even at the end the Axis did not use them (there was some use by Japan and Italy but only against sides with no credible response). Most major countries regard even the threat to go nuclear in response to conventional invasion as morally beyond the pale.
One thing that circumstances in Ukraine (since 2014) has taught NATO powers is that conventional military strength does matter even when you are fighting a nuclear-armed power. In 2014 Ukraine was powerless to defend it own territory. The conventional army was poorly organised along soviet lines and poorly trained and funded. Russia got what it wanted with little effective opposition. But in 2022 the Ukrainian army had been completely rebuilt on much more flexible western lines, it was much better equipped (though hardly adequately). But, against expectations the inferior (but far better organised and more highly motivated) Ukrainian force was able to hold and then push back the numerically superior Russians.
Part of the reason Ukraine held was that they had learned from 2014 and created a much more effective military. NATO seems to be partially motivated by that lesson and seems to have learned that–even when nuclear weapons are irrelevant–conventional power matters. Stopping an aggressive power with conventional means matters not least because it does not risk any morally dubious use of nuclear weapons which would also risk global escalation. adequate conventional power is less risky.
The lesson is also analogous to the Swiss model where a state can remain neutral but still provide an adequate deterrence to invasion or threat by retaining a strong enough conventional capacity that vastly increases the cost of an opportunistic invasion by even a very strong neighbour. Finland and Sweden used to behave a little like Switzerland but have now concluded that being part of a bigger alliance can boost both their conventional power and bring them under a nuclear umbrella. They both seem to have concluded that a stronger conventional defence deters opportunistic aggression by an expansionist neighbour.
Many other longstanding NATO countries seem to have similar reasoning. Some have allowed their military capacity to wither (in the absence of immediate conventional threats). Germany in particular has a fairly weak military which needs substantial investment. But there is now a credible threat from Russia who have shown they are prepared to use it (while also showing that the threat was somewhat less credible than everyone thought!) But, the threat is there and the way to deter it is to ensure that your conventional military is in a credible state.
It is politically advantageous to be contributing more, and might be a cost saving move in the long run.
Over several decades NATO has been funded (in terms of troops and equipment) disproportionately by the US, even when sizes of population and economy are taken into account. This has long been a source of complaint from the US. NATO countries agreed to spend 2% of their GDP on defense, but until very recently few did so. In general countries assumed that the US would continue with its level of spending and commitment despite this, and again until recently this was probably true.
In the last few years there has been a stronger move for the US to remove itself from NATO, or at least to weaken commitments. The last US president made a believable threat to do so, and in the medium term it is certainly possible that such a threat might be repeated, and even carried out. Strengthening defense budgets by other NATO members weakens the arguments for doing that. If the US were to leave NATO then the remaining countries would be very much weakened in terms of protection, and would probably result in them having to increase expenditure even more.
Most of the other answers have focused on non-nuclear weapons as being necessary to buttress nuclear weapons, as they can't provide 100% security. Without wanting to disagree with that point, there is another mechanism that could be at play here.
The stability-instability paradox says that the deterrence provided by nuclear weapons may paradoxically lead to greater forms of lower level conflicts e.g. more local wars, proxy wars.
This is because the two main sides have the insurance of their nuclear arsenal, so they feel more free to push their adversary in minor ways given they suspect the adversary will rationally want to avoid nuclear strikes. And add to that the nature of an antagonistic relationship between nuclear powers - it's easy to mistrust another country's diplomacy when it literally has weapons of mass destruction pointed at all your major cities, and when trust and empathy is lost between states, it becomes easier to justify the necessity of force as a tool or insurance policy there.
In other words, its possible nuclear weapons can actually increase the (perceived) need for and utility of conventional forces.
Ukraine and Germany are in all reality not that different in terms of Nuclear Support.
Germany has some more papers, that say they will be defended by other Nations. That's all.
If Russia uses their Nukes against Germany, is the US really going to say: "Well that was a good run, time for everyone on the planet to die? I mean Germany is already in Ruins, but we Americans and every Russian citizen need to die as well?"
That wouldn't be logical.
And the same goes for a conventional Invasion of Germany/Ukraine. What's really the difference? Yeah, Germany has those papers, but in the end wouldn't you say from a moral view Ukraine should be defended just as much as Germany? So you can easily imagine that the invasion of Germany could get the same Response from allies.
To be fair, it is more likely for Germany to be defended by their Allies conventionally. For that Reason NATO has stationed allied troops in territory bordering Russia. It forces the allied countries to be involved, because in a first strike, their troops would be attacked.
Now, if Germany is defended by their Allies, why do they need to increase spending? Because they are seen as not contributing enough to this shared defense.
And if you don't have military power yourself, what happens if 50% of NATO someday elects some maniacs or they lose their democracy? At the end of the day Military Power gives you a louder voice and simply more power. Sometimes Power is Power (thanks Game of Thrones).
As has been said elsewhere, Nukes should be treated as a Defensive weapon and at the height of the cold war, the thinking was any war where Nuclear Launch was used, it was done so in a "If I'm going down, I'm taking you with me!" attitude. Most nuclear powers maintain a "Second Strike Only" policy for their nuclear arsenal (We will only launch our Nukes if we detect an inbound launch against us) and have done so for decades.
The U.S. is one of two nations that do not have a true second strike policy but maintain a limited First Strike Policy, that allows them to launch a first strike if the situation is desperate enough for them to do so. During the cold war in the 80s, the idea was that they would maintain conventional warfare against the Warsaw pact nations for as long as possible, but would launch tactical strikes (one or two missiles) if it looked like they would lose critical battles (generally, these launches would be against reserve forces that would turn the tide of an ongoing battle). Even then, the U.S. invested a lot of money in conventional forces to prevent this policy from being used in the first place (and while largely developed after the Hiroshima-Nagasaki bombings, the use of Nukes on Japan would be consistent with the limited first strike policy as the invasion of mainland Japan was expected to have a high level of casualties for allied forces. To give a perspective on this, the number of casualties was so high, that all physical Purple Heart medals (awarded to military personnel wounded in combat) award since World War II are from an order that the U.S. military placed as part of the build up to a conventional invasion of Japan... they haven't had to order the manufacture of new medals since the mid-40s. Needless to say, nothing has come close to doing that in an actual military conflict since.).
Oh, and incase you're wondering, the only other non-Second Strike policy nuclear nation is Israel, who's policy boils down to "We don't have nuclear weapons, and if we did, we certainly would keep it a secret and deny we have them, because we don't have them, and wouldn't make any public communications about our non-existent launch policy for our non-existent nukes, which we definitely do not have, because we don't have nuclear weapons. We certainly would never secretly maintain nuclear weapons, deny they exist at all, despite strongly hinting that we do have them so everyone else knows to back down... that would be totally irresponsible. But our current Nuclear policy is Second Strike Only Launch" (For an added bonus, have the report respond, "Sir, that's all well and good but my question was about the date of the IDF's family picnic day."). And if you didn't get that complicated boil down of the policy, the joke is that the Israeli Government officially denies that they have nuclear forces. However, even the most ardent supporter of Israel believes this is a blatant lie, not the least in part because the Israeli government has made it clear they do have them. Part of the reason for this is because regional politics are not favorable to Israel and that officially having nukes would spark further tensions with neighbors, but not having them is a giant gap in defenses when many of the other middle east nations are interested in getting nukes and seeing Isreal no longer exist. So officially they deny having them, but unofficially they let the world know they have them.
Well, let's ask this another way. How would you fight any sort of proxy war with nuclear weapons?
Zelenskyy, for example, doesn't want nukes. This is because Ukraine doesn't have the funds or the technicians to use them. He'll trade his civilians' safety for cheap American cluster bombs.
They're fine if you're North Korea and you really, really don't want peaceful transition of power, but not for keeping up spheres of influence.
There is one purely mathematical reason why European defense budgets are increasing. The cost of military technology is increasing. This is due to a number of factors, including the increasing sophistication of military technology, the cost of research and development, and the cost of production. Additionally, the cost of materials used in military technology is also increasing due to inflation, market demand, and other factors. As a result, military technology is becoming increasingly expensive, and governments and militaries are having to invest more resources into acquiring and maintaining advanced technology.
As monetary value is entirely divorced from reality, this increase in monetary units spent doesn't necessarily equate to an increase in either quantity or capability of military technology purchased. Couple all this with the demonstrable fact that Europe has no military enemies and it becomes obvious, as chomsky would say, that "defense" spending is just a euphemism for high tech economy subsidies in what we call a free market.